Seasonality and your business

Why does seasonality affect your business?

Seasonality in your business refers to regular and predicable changes in business activity at given times or periods. These changes or fluctuations can occur during the workday, week, month or seasons of the year. The most significant changes generally occur during the seasons of the year where there is a marked change in supply and demand patterns. On the supply side, the agricultural sector is particularly affected and, on the demand side, manufacturers and most small businesses will see a drop or an increase in demand for goods or services.

How does seasonality impacts on your business?

It can affect cash flow, sales volumes, efficiencies, capacity, stock holding and labour requirements. The business owner must, therefore, be aware of when and to what extent their business will be affected by any changes in demand or supply. Ignoring these patterns can result in lost opportunities or place the business at unnecessary risk.

What can a business owner do?

To take advantage of opportunities and minimize potential threats, the business owner needs to plan ahead. This would include preparing a budget with corresponding cash flows that incorporate any changes in business activity. The more accurate the forecast, the better prepared the business owner is able to anticipate the future so that they can capitalise on opportunities and avoid potential failure.